Don’t Be a Target for Lawsuits

OP MANUFACTURERS REPS 01By Sanford E. Watson

Manufacturers’ representatives often are sued by consumers. Some claims are related to advertising, while others may allege that a product itself is defective or unsafe. In the vast majority of these lawsuits, the manufacturer – not the representative – is the true target. Being sued may be inevitable depending upon the industry, but there are certain precautions manufacturers’ representatives can take to avoid or mitigate the impact of any lawsuit. In my practice defending manufacturers’ representatives, I have identified four common mistakes that can paint a target on the back of any unknowing manufacturer’s representative.

To illustrate these mistakes, let’s take for example my client Wally. Wally is a new manufacturer’s representative responsible for growing the business. When he started his new job, he found an old brochure lying on his desk and decided to create a new one. He used his personal email account to contact a friend at a small advertising company who owed him a favor. In the email, he told his friend that the old brochure was a piece of “(expletive),” among other things, and he needed something new. His friend came up with a new electronic brochure using the same data from the old brochure. Wally wanted to send out the new brochure to potential customers as quickly as possible, so he faxed it to 500 potential clients. Wally was sued. How did he paint a target on his back?   

1. A Tale of Two Emails

Using one personal email address for everything may not be a problem unless you are brought into a lawsuit. Wally was forced to turn over his personal email account. Any witness in a business case may be required by the court to turn over an email account if it was used for business purposes, even if it also contains personal email messages. While there are ways to electronically sort email, the process can be costly, and sorting email manually can be very time consuming.

Manufacturers’ representatives may choose to use their personal email addresses (1) because they represent more than one manufacturer, (2) for confidentiality purposes, or (3) just to maintain their independence. Public email servers like Yahoo and Gmail are free or inexpensive to use. If you choose to use a public email server for both business and personal email, set up two different email accounts and keep them separate. Compared to turning over your personal email in a lawsuit, keeping two accounts is a minor inconvenience.

2. Email Hygiene – Keep It Clean

Never say in an email anything that you do not want to become a trial exhibit. Wally’s email disparaged the company brochure. He was called to testify because he made an off-color joke and a negative comment that could be taken out of context. Remember, too, that sometimes it’s better to have a face-to-face conversation or pick up the telephone.

3. Always Use Approved Company Literature

Creating product literature carries certain risks. The old data in Wally’s new brochure claimed the product was 99.9 percent effective. Unbeknownst to him, the manufacturer’s latest unreleased data suggested the product was only 60 percent effective. Had he checked, the company would have told him not to use the old brochure or the data itself. Wally was sued for false advertising.

Some industries prohibit representatives creating brochures, so check with the manufacturer before creating any literature. If you must create marketing materials, make sure the manufacturer signs off on it before you distribute it. Otherwise, the best and safest practice is to stick with the manufacturer’s current brochures, instructions for use or other literature.

4. Never Send Unsolicited Faxes

Unsolicited faxes should never be used as a substitute for cold calling or mass mailing. Under the Telephone Consumer Protection Act (TCPA), sending an unsolicited fax for advertising to anyone is a violation of federal law. A business can pay as much as $500 in damages for each unsolicited fax. Wally’s 500 faxes could potentially cost him $250,000. It takes only one unhappy fax recipient to report a violation, as the law encourages whistleblowers. Although there are exceptions to the law, faxing unsolicited advertising just isn’t worth the risk when alternatives like cold calling, mailing or email can be used to reach potential clients.

Wally is a fictitious client, but the examples above are based upon real client experiences. While a manufacturer’s representative may not always be able to avoid litigation, following these tips can mitigate potential liability or inconvenience. If you are sued, involve legal counsel immediately. Manufacturers may provide counsel to their representatives when they are also a party to the lawsuit, but there is no guarantee. To minimize the risk of being sued, remember how not to paint a target on your back!

Sanford E. Watson, a partner with Tucker Ellis LLP, is a trial lawyer practicing in the areas of medical products liability, real estate and commercial litigation, ethics and public law. He spends a substantial portion of his time defending distributors, manufacturers’ representatives, and sales representatives in products liability cases. He can be reached at sanford.watson@tuckerellis.com.

 

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